The Crown Juul Of The Industry

I fondly remember, like it was yesterday, the first time I was told of the dangers of cigarettes. Though I never expressed any interest in smoking, and was never caught smoking or had any reason to give my parents a reason to concern, I was still given the talk. I’m sure you know exactly what I’m talking about. Whether our parents explained it, or we watched videos in school showing individuals whose lives were tragically altered due to smoking cigarettes.

For years, smoking was synonymous with high-fashion, celebrities, and a general sense of feeling classy. We were mesmerized by the likes of Holly Golightly a la’ “Breakfast at Tiffany’s,” and we truly didn’t no any better. Nevertheless, medical experts have proven the very obvious fact that smoking is an unhealthy habit that can lead to cancer. 

Suffice to say that smoking has lost much of its glitz and glamor, but tobacco addiction remains alive and well, and has recently taken the form of beautifully crafted, USB-looking device called a “Juul.” Juul Labs Inc., a San Francisco-based company, is responsible for the creation of the aptly named  “Juul” e-cigarette. For those unfamiliar with the name of the product, I can almost guarantee you’ve seen someone using one of these devices in the club or sneakily taking a puff in line at the DMV. The Juul has become something of a cultural sensation among the younger crowds because users can justify its healthier nature compared to cigarette smokers. 

The founders of Juul, James Monsees and Adam Bowen, were two Stanford University students who were fed up with a lack of qualitative alternatives to cigarettes. In their original presentation in 2004, Monsees and Bowen claimed that the issue with cigarettes, aside from the obvious harm to one’s health, was that the act of smoking was offensive to others.

Many years later, Juul Labs has done its part to develop products designed to help smokers break their habits, while also investing $30 million in youth prevention, deleting its social media, as well as working to enforce stricter age verification for online sales. 

“Underage use is an issue we desperately want to resolve. It doesn’t do us any favors. Any underage consumers using this product are absolutely a negative for our business. We don’t want them. We will never market to them. We never have. And they are stealing life years from adult cigarette consumers at this moment, and that’s a shame.”

–James Monsees, co-Founder, Juul Labs 

In November of last year, the U.S. Food and Drug Administration (FDA) announced that it would ban flavored tobacco products, including e-cigarettes, which dealt a massive blow to Juul’s business because many of its popular Juul “pods” were flavored. According to recent reports, the Company predicts $3.4 billion in sales revenue for 2019, nearly triple what it generated last year. Analysts believe these projections are what ultimately led to American tobacco behemoth Altria Group (MO) acquiring a 35% stake in Juul Labs. 

Juul came under scrutiny for the number of underage users of its products, and, in their announcement of the Altria (MO) deal, they explained that their “intent was never to have youth use JUUL products. Nevertheless the company agreed to a minority investment with Altria (MO), a company belonging to an industry notorious for corrupting youths with habitual cigarette smoking. 

“Altria today announced a minority investment of $12.8 billion into JUUL for a 45% ownership in the company along with services to accelerate our mission. We understand the controversy and skepticism that comes with an affiliation and partnership with the largest tobacco company in the US. We were skeptical as well. But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers.” 

-Kevin Burns, Chief Executive Officer, JUUL Labs